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| Innovation can create crucial advantage during an economic downturn |
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| Mar 23, 2010 Published in ideas
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| Keywords: business, innovation, recession, social media
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 Innovation is an important tactic in a tough economic climate. The ability to create a new product, service or method of carrying out business is always important. In a down economy it becomes even more important as momentum gained exiting depression/recession can allow you to gain crucial advantages over competitors that fail to innovate.
The ability to maintain an activity such as marketing effectively at a time when competitors may be cutting advertising can boost brand image and mindshare hugely. This is perhaps part of the reason for the success of Proctor and Gamble. They created the soap opera in 1933 with the show "Ma Perkins". By 1939 P&G had an array of 21 radio programs sponsored by its products helping them achieve $230 million in sales in 1937. The use of radio in this way was bold for the time, commercial radio was only 10-years-old. Seizing such a powerful position in a new medium particularly in challenging financial times was hugely beneficial for P&G. Subtle changes of practice such as continuing to spend on advertising and utilising a new medium had an enormous effect on P&G's business in the 1930's. Can similar effects be garnered today?
We have at our disposal a relatively immature platform with the Internet, and social media in particular. It may seem strange to call the Internet an immature platform but despite its ubiquity it is being used in a very limited way. The potential is huge and there is a great deal of potential, but the majority of the usage of the technology is imitative.
This restricted practice is natural in a new medium. New spaces, both physical and virtual, are disorienting and providing comfort through expected outcomes is a usual way to help people ease themselves into the space. Innovation is difficult and sometimes traumatic. Users dislike novel interfaces and practices and designers are quickly complicit in creating a homogenous experience. This is not only true of interface and visual design but usage also.
The rise of user generated content and social media were powerful changes in the online landscape and many are still suspicious of them. Wikipedia is still derided as unreliable due to its open culture, yet it has grown to contain over 3 million articles in its English language version only (there are 240 different language versions) in 19 years. While its open model may leave it open to (temporary) inaccuracies Wikipedia has in a very short time created a massive repository of knowledge. It has done this through an open editing model and the evolution of a culture that moderates the input.
It is notable that the primary innovation that created Wikipedia was cultural rather than technological. The key transformation was the open editing model that allowed a massive influx of new material. The MediaWiki platform emerged to facilitate the culture of input and editing. This is not to denigrate the role of technology but innovation in the world of the Internet is at least as much about the concept as it is about the technology.
The rise of social media has had a huge impact on the online world and is an even younger subset of the developing online realm. These media are being actively colonised by businesses with variable results. This world is so immature that it changes at a frantic rate but it is full of potential for innovation. There is no clear best practice and what might be termed such quickly becomes obsolete. This is a fertile arena for business innovation.
There is scope for a bold idea to change the terrain of business on social media in the same way that Proctor & Gamble did for radio in the 1930's with the creation of soap operas. It won't take the same form and like most powerful ideas it will have at its core a very simple concept. The key that unlocks the treasure chest is the method of enabling the idea to happen.
There is little investment required to experiment in this sphere. The associated costs are personnel there is no capital component so there is a very low threshold to investigating this type of innovation. The gains, however, could be colossal particularly in comparison to competitors who fail to grasp the opportunities presented by the down economy. |
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